Rajesh Exports gains after acquiring world's largest gold refinery

Rajesh Exports rose 3.42% to Rs 547.05 at 12:05 IST on BSE after the company said it acquired Valcambi, the world's largest gold refinery.

The company made announcement during market hours today, 27 July 2015.

Meanwhile, the S&P BSE Sensex was down 320.30 points or 1.14% at 27,792.01.

On BSE, so far 2.87 lakh shares were traded in the counter as against average daily volume of 2.82 lakh shares in the past one quarter.

The stock hit a high of Rs 549.95, which is also a record high for the stock. The stock hit a low of Rs 525 so far during the day. The stock had hit a 52-week low of Rs 117.35 on 16 October 2014.

The stock had outperformed the market over the past one month till 24 July 2015, rising 82.4% compared with Sensex's 1.38% rise. The scrip had also outperformed the market in past one quarter, gaining 138.79% as against Sensex's 2.46% gain.

The large-cap company has equity capital of Rs 29.53 crore. Face value per share is Re 1.

Rajesh Exports (REL) through it's wholly owned subsidiary in Singapore has fully acquired European Gold Refineries, the 100% holding company of Valcambi in an all cash deal with a total investment of $400 million. Grant Thorton assisted Rajesh Exports in due diligence and Credit Suisse is part financing the acquisition through a long term debt. The acquisition will be earning per share (EPS) accretive for Rajesh exports. REL will maintain the globally acclaimed management of Valcambi.

Valcambi is the world's largest precious metal's refining company headquartered at Switzerland. Valcambi has processed and sold 945 tons of gold and 325 tons of silver on an average per year during the last three financial years which is more than the annual consumption of gold in India.

Valcambi refinery is London Bullion Market Association (LBMA) accredited and Valcambi gold bars are accepted as good delivery bars across all the official commodity exchanges in the world like COMEX (Chicago Commodities Exchange), NYMEX (New York Commodities Exchange), TOCOM (Tokyo Commodities Exchange), Shanghai Gold Commodities Exchange, DMCC (Dubai Multi Commodities Exchange), MCX (Multi Commodities Exchange, India) etc.

Since the last 53 years Valcambi has been a consistently profit making and dividend paying company. For the last three years on an average per year Valcambi generated revenues in excess of $38 billion (Rs 236500 crore) and EBITDA (earnings before interest, taxes, depreciation and amortization) of $33 million (Rs 205 crore) by refining and selling 945 tons of gold and 325 tons of silver per year. Valcambi is a zero debt company with considerable cash surplus on it's balance sheet.

Valcambi was owned by Newmont mining corporation and a group of Swiss investors. Newmont is one of the world's biggest gold and copper mining company and is listed on the New York stock exchange since 1925 and is a part of S&P 500 Index. The owners of Valcambi conducted a global search for divesting Valcambi, after an extensive search selected Rajesh Exports to acquire Valcambi.

Rajesh Exports' consolidated net profit jumped 246.4% to Rs 205.57 crore on 56.7% rise in total income to Rs 19161.98 crore in Q4 March 2015 over Q4 March 2014.

Rajesh Exports (REL) headquartered in Bangalore manufactures gold & diamond jewellery. REL exports its products world wide and distributes them within India to the wholesale jewellery market. REL also retails its products through its own network of retail jewellery showrooms Shubh Jewellers spread across India.

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